From design studio to factory, US-Japanese auto links tighten

By
Charles E. Dole, Special to The Christian Science Monitor /
September 25, 1987

Tucked away on a hill a few miles north of downtown San Diego, a Japanese car-styling studio tries to figure out what the American motorist will will want in a few years. So far Nissan Design International has come up with some pretty strong entries, among them the latest rendition of the Nissan Pulsar, a pickup truck, and the Pathfinder. None of this has been lost on Ford Motor Company. Now the design studio is elbow-deep in what could wind up as a joint effort with Ford, one more indication of the increasing ties between the big Detroit-based carmakers - Ford, General Motors, and Chrysler - and the Japanese.

A small van is expected to be one result. A decision on whether to go ahead with it is not expected till spring, but it will not be a four-wheel-drive.

Indeed, it is Ford's need that is driving the search. ``We expect the van business to be a big part of Nissan in the future,'' says Thomas D. Mignanelli, Nissan's vice-president of sales and marketing, who left Ford a few months ago. Also, he predicts, ``the Stanza wagon segment is going to get much, much bigger.''

The Japanese carmakers are burrowing deeper into the United States marketplace with new ideas, a wider array of cars, and a strong sense of what the US motorist will buy. Helping the Japanese achieve their inroads into what used to be Detroit's almost exclusive blacktop are the large numbers of former Ford, GM, and Chrysler executives who now work on the other side of the street.

This hasn't been entirely bad for Detroit, however, because the Detroit's Big Three are cutting back sharply on their white-collar work force, GM alone by 25 percent.

The Japanese have shown they can respond to market shifts in the US, and they seem to get new cars on the road while domestic carmakers are still discussing the shift in the wind. Nissan, for example, which sold more cars and trucks in the US in 1985 than Toyota, sees the need for a new image here, and has given Chiat/Day, a California-based advertising agency, a $150 million contract to create it.

Nissan also has just restructured its organization in the US to include the new upscale division, called Infiniti, comparable to the Honda Acura division. Toyota will also launch a new high-level division that will chase not only such old-line US brand names as Cadillac and Lincoln, but also West Germany's BMW, Audi, and Mercedes-Benz. The move should also be more profitable for the Japanese, badly shaken by the 60 percent falloff in the value of the dollar against the yen. Japanese car prices so far have gone up only about 20 percent, forcing the carmakers to look for new ways to cut costs.

This means even more pressure on Detroit, which is battling frantically to compete with the quick footwork of the Japanese. One way for Detroit to fight back is by joining the competing Japanese.

The world is facing a huge glut in carmaking capacity, including an excess in the US alone of up to 3 million cars a year, according to some estimates. Japanese auto plants now operating or being built are adding as much capacity in the US as Ford Motor Company now has.

Honda has been producing cars in Ohio for the past several years and now builds Civic engines in another new plant nearby. Nissan produces both cars and light trucks in Smyrna, Tenn. Toyota builds the Chevrolet Nova in a former GM plant in Fremont, Calif., as well as the Corolla FX-16 for its US dealerships.

Toyota is building an assembly plant in Kentucky, while Subaru and Isuzu, the latter already providing cars to GM, are putting up a plant in Tippecanoe, Ind., with a capacity of 240,000 vehicles a year.

In 1989, Mazda's joint operation with Ford will produce 240,000 new cars in Flat Rock, Mich.

In Canada, Honda can produce up to 80,000 new cars a year at its new plant in Alliston, Ontario, while Toyota will begin producing cars in 1989 at a new plant in Cambridge, Ontario.

Unlike GM, which built a bunch of new assembly plants in North America over the past few years, Ford's only new North American plant is in Hermosillo, Mexico, where it produces the Mercury Tracer.

Indeed, a battle royal is shaping up in the US for the commitment of the American car buyer. ``I think that in the future you have to take the words `domestic' and `import' out of the vocabulary, because they just won't be applicable any longer,'' says Mr. Mignanelli of Nissan.